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What's the value of a lead investor?

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I've heard a lot of talk about "party rounds" in VC/Seed fundraising - where there are tons of investors but no one is the lead investor. I understand that having a lead is easier in that there are fewer people to talk to and checks to collect, but is there another real value to having a lead investor after the deal is closed?

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If you know what you are doing and hitting all the milestones and can handle the investor interface lead investor may not be important.
Unfortunately they can be V important in the negative if things are going wrong-they will be people who squeeze hardest if they believe problem is with Founder and will be working to dilute insiders down below control level.
If everything going well then they can be helpful in bringing in more capital-but if bad things happen they can make them a lot worse.
Reality is everyone want to be on a winner so that side is easy-when they think there is a problem people/investors want to take control and if there is a lead investor it is much easier for them to aggregate power.
Tons of investors means they have to get organised to exert influence-so you get time.
Just some thoughts based on experience and seed is a really bad level to get a lead because they can/will own you.

for me, getting a lead investor isn't about having to collect less checks etc. it's much more about when the round closes.

If you have a 'lead', then basically they will work their butt off to make sure that you raise a series A, else their reputation is on the line. If you raise lots of small amounts from lots of different people, no one really has responsibility. If you fail, they can just delete you from their portfolio and it's no big deal.

Whether it is one of a few, it is good to empower individuals as the point/lead investor. If they have significant skin in the game, they instantly earn credibility and will be able to help attract other investors.

The lead investor(s) will also be very interested in leveraging there network and experience in a manner that will helps their investment succeed.

If you want to go the institutional venture capital route, you must have a lead investor. The lead investor performs 3 key functions:

1) They do the due diligence, and share it with other investors,

2) They bring in "follow-on" investors

3) They set the terms for the investment round.

A "cluster" investment is just that--no one does the above 3 things, and subsequent rounds of institutional venture capital become nearly impossible to get.

Now, whether or not you SHOULD go the institutional venture capital round is another question. In most cases, I'd say that if you have access to crowd funding and/or family/friend funding, go for it. Just be sure that the money that you raise is the LAST MONEY YOU WILL EVER NEED.

The greatest thing about finding a lead investor is that she makes it easier to bring in other investors, but it sounds like that's less of a problem for you right now.

The next advantage, I think, in order of importance, is that a lead investor can become your central point of contact in dealing with your investors. If you have more than three investors to deal with directly, you may find yourself spending more time and energy than you'd like "managing" your investors, at the expense of managing the company. However, that would require the lead investor to be a leader in more than just the amount invested or the equity held. She needs to be someone whose judgement is trusted by the other investors, who they will feel comfortable following without stopping to make their own informed decision at every turn.

Ask yourself: do you know how many board members the company is going to have, and who they are going to be? How easy will it be to get every investor to agree on it? That's just one example of many decisions that are preferably made on a consensus. Having (the right) lead investor can reduce the complexity of such decisions.

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